DAIMLER AG (formerly known as MERCEDES BENZ AG) v. HELGE HERBERT LEIDUCK AND ANOTHER

HCA 4089/1994

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.4089 OF 1994

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DECISION

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1.   Before the court is the Plaintiff’s Summons dated 2 December 2013 for leave to serve upon the Defendants the interrogatories in Appendix 1 to this Decision (“Interrogatories”) concerning various matters contained in the 21^st Affidavit of Jeremy David Levy (“Mr Levy”) dated 23 August 2013 and the 4^th Affidavit of Helge Leiduck (“Mr Leiduck Jr”) dated 23 September 2013 and the exhibits thereto. 

2.   For the contents of Mr Levy’s 21^st Affidavit and Mr Leiduck Jr’s 4^th Affidavit and for the circumstances leading to the filing of these affidavits and with reference to which the Plaintiff sought to justify the Interrogatories, I believe it is sufficient for me to refer to paragraphs 2 to 19 of the Decision that I handed down on 22 April 2014, which I shall not repeat.  Unless otherwise stated, I shall in this Decision continue to use the abbreviations adopted in my said earlier Decision.

Summary of the Plaintiff’s grounds for serving the Interrogatories

3. It is well settled that the party seeking to interrogate has to demonstrate that the interrogatories are both relevant and necessary (either for the fair disposal of the cause or matter or for saving costs).  See, for example, Kao, Lee & Yip v Koo Hoi Yan, HCA 8847/1993, unreported, 23 April 2001, per Ma J (as he then was) at [7].  

4. Mr John Yan SC (with him Ms Sara Tong), Counsel for the Plaintiff, identified 3 matters to which he said the Interrogatories would be relevant:

(1) the determination of the Competency Issue and, consequently, also the Effects Issue as respectively defined in paragraphs 18 and 19 of my Decision dated 22 April 2014;

(2) the exercise of the court’s discretion as to whether or not to enforce the cross undertaking as to damages upon which the Plaintiff applied for and obtained the Injunction; and

(3) the question of costs.

5. As for necessity, Mr Yan SC argued:

(1) First, given the relevance of the Interrogatories, they would obviously be necessary for the purpose of fairly disposing of the issues to which they relate.

(2) Second, the Plaintiff has reserved the right to require the Defendants to tender Mr Levy and/or Mr Leiduck Jr for cross-examination on their said respective affidavits. However, the Defendants’ answers to the Interrogatories might possibly obviate the need for, or at least shorten, such cross-examination, which would lead to a saving of costs and time.

6. I shall consider Mr Yan SC’s submissions on relevance and on necessity based on relevance (which can be dealt together) first.

7. In this regard, Mr Yan SC reminded me that:

(1) The test of relevance is a fairly wide one.  The right to interrogate is not confined to facts directly in issue, but extends to any facts the existence or non-existence of which is relevant to the existence or non-existence of the facts directly in issue: Marriott v Chamberlain (1886) 17 QBD 154 (CA), per Lord Esher MR at 163.  The test of relevance is satisfied if the potential relevance of the subject matter interrogated suffices: Lau Tak Wah Andy v Hang Seng Bank Ltd, CACV 612/2011, unreported, 18 July 2001, per Stone J at [17].

(2) It is not necessary that the answers to interrogatories should be conclusive of the question at issue.  It is enough that they should have some bearing on the question and that they might form a step in establishing liability: Blair v Haycock Cadle Company (1917) 34 TLR 39 (HL), per Lord Finlay LC at 40.

(3) Interrogatories which go to support the applicant’s case or to impeach or destroy the opponent’s case are admissible: Plymouth Mutual Co-operative and Industrial Society Limited v Traders’ Publishing Association Limited [1906] 1 KB 403 (CA), per Stirling LJ at 416-417.

Relevance to, and necessity for the fair disposal of, the Competency and Effects Issues

8. According to Mr Yan SC, the following matters raised in Mr Levy’s 21^st Affidavit and Mr Leiduck Jr’s 4^th Affidavit are relevant to Mr Leiduck’s mental condition in 2013:

(1) Mr Leiduck Jr’s personal observations of Mr Leiduck’s deteriorating condition since March 2013;

(2) Mr Leiduck’s alleged reliance on Mr Leiduck Jr to deal with his personal affairs which led to his execution of a power of attorney to Mr Leiduck Jr on 27 March 2013;

(3) Mr Leiduck’s inability to testify in the Augsburg court and the circumstances leading to the examination of Mr Leiduck by Dr Stein and the Stein Report;

(4) the circumstances leading to the first examination of Mr Leiduck by Dr Pfeffer in May/June 2013 and the 1^st Pfeffer Report; and

(5) the circumstances leading to the second examination of Mr Leiduck by Dr Pfeffer in August 2013 and the 2^nd Pfeffer Report.

9. I am prepared to accept that interrogatories on these 5 matters may be regarded as potentially relevant to Mr Leiduck’s competency or otherwise during 2013, provided that they are couched in terms that are restricted to eliciting details about Mr Leiduck’s mental condition which may throw light on whether and, if so, when Mr Leiduck was of unsound mind and, if so, whether he appeared, by reason of his being of unsound mind, to be incapable of receiving just impression of the facts respecting which he was examined or relating such facts truly.

10. However, the bulk of the Interrogatories go well beyond this.  They are notably Interrogatories 1(ii), 2, 3, 4, 5, 6, 7, 8, 9(v) and (vi), 10, 11(ii) and (iii), 12 and 13(ii) and (iii).  I have considered these interrogatories closely.  It appears to me that, if answered, they would only pin Mr Leiduck Jr and Messrs Robertsons (“Robertsons”) down on the following:

(1) Mr Leiduck Jr’s involvement in the conduct of these proceedings before his appointment as Mr Leiduck’s next friend in November 2013;

(2) Mr Leiduck Jr’s instructions to and/or communications with the doctors who had taken care of and/or examined Mr Leiduck (namely, Dr Funk, Dr Pfeffer and Dr Stein) as well as the lawyers acting for Mr Leiduck (namely, Robertsons before this court and Dr Kirsch before the Augsburg court) concerning the proceedings in Hong Kong and Augsburg with which Mr Leiduck was concerned and regarding Mr Leiduck’s mental health, his examinations by the said doctors and the results of such examinations; and

(3) the time when Mr Leiduck Jr and Robertsons respectively became aware that Mr Leiduck had, or might have, become incompetent as a party and as a witness.

Such matters are irrelevant to the Competency Issue (and, therefore, the Effects Issue).

11. As for the remaining Interrogatories (numbered 1(i), 9(i) to (vi), 11(i) and 13(i)), to the extent that the answers thereto may tell us when Mr Leiduck Jr first observed various symptoms of cognitive impairment in Mr Leiduck (i.e. losing concentration and memory, having to pause to think, being frequently lost for words, having hallucinations, mistakenly thinking that he was still living in Langenberg away from which he had moved more than a decade ago, asking whether his daughter-in-law was an Asian when she is not, being unaware of reality, over-estimating himself, taking his delusions seriously and having considerable mental performance deficiencies), these interrogatories may at first glance be potentially relevant (in the broad sense of the word for this purpose) to Mr Leiduck’s competence or otherwise in 2013.

12. However, it does not follow that the answers to Interrogatories 1(i), 9(i) to (vi), 11(i) and 13(i) are therefore necessary for the fair disposal of the Competency Issue, to which they relate.  Indeed, this case illustrates that necessity does not necessarily follow from relevance.

13. In this connection, in support of his case for relevance to the Competency Issue, Mr Yan SC made the point that Mr Levy’s 21^st Affidavit and Mr Leiduck Jr’s 4^th Affidavit contained the only factual evidence then available as regards the Competency Issue; that the Interrogatories sought further details and particulars as to the allegations made in those affidavits; and that the Defendants’ answers would provide the joint expert (Dr Förstl) with relevant facts (confirmed on oath) to consider and take into account in providing his opinion on the Competency Issue.

14. In my view, the Plaintiff acted in haste.  The Plaintiff’s Summons predated the disclosure of Mr Leiduck’s medical records, which was required of the Defendants by the Competency Issue Directions.  In fact, the Plaintiff acted even before the expiry of the time allowed to the Defendants to comply with such directions.

15. As one would expect in view of the Competency Issue Directions, the Defendants have provided the court, the Plaintiff and the experts with the medical and nursing records enumerated (in a chronological order) in the list in Appendix 2 to this Decision.  These records (together with their English translations) are voluminous, filling up 6 leverarch files (Trial Bundles 18, 19, 22, 23(1), 23(2) and 24).  They are extensive, spanning over the period from November 2001 right up to Mr Leikduck’s death.  They are contemporaneous.  Their independence cannot be questioned, having been created by Mr Leiduck’s doctors, nurses and carers (who have nothing to do with these proceedings) in the course of discharging their professional/work duties.  Some of the documents are very comprehensive.  In particular, I would like to highlight the 161 pages of care records kept by the nursing home in Essen at which Mr Leiduck stayed from 2 February 2012 to 18 April 2013.  These care records detail Mr Leiduck’s condition and behaviour and changes therein, good or bad, on a daily basis. 

16. In light of the abundance of contemporaneous and independent medical and nursing records that are available in respect of Mr Leiduck, I do not anticipate being further assisted by Mr Leiduck Jr’s answers to Interrogatories 1(i), 9(i) to (vi), 11(i) and 13(i) to any or any material degree. 

17. In any event, Dr Förstl has been provided with Mr Levy’s 21^st Affidavit and Mr Leiduck Jr’s 4^th Affidavit and the exhibits thereto.  He also interviewed Mr Leiduck Jr, no doubt bearing in mind the matters deposed to in these affidavits.  Dr Förstl has set out the information obtained by him from Mr Leiduck Jr at pages 39-40 and 43-44 of his first report dated 25 March 2014.  I will take such information into account in ruling on the Competency Issue.  It is to my mind unnecessary to make Mr Leiduck Jr answer Interrogatories 1(i), 9(i) to (vi), 11(i) and 13(i) just so that I can have the same or similar information verified on oath.  Indeed, if Mr Leiduck Jr were ordered to answer these interrogatories, I fear from my experience of adjudication in these proceedings that his answers may just serve to provide yet another source of contention between the parties.  Mr Leiduck Jr is a key witness on various issues relevant to whether there should be an inquiry as to damages.  He gave evidence in court for about 8 days from 14 to 25 February 2013.  It is clear from his cross-examination by Mr Yan SC that the Plaintiff is very skeptical of Mr Leiduck Jr’s personal interest and involvement in these proceedings as well as his credibility and reliability as a witness.

Relevance to, and necessity for the fair disposal of, the Defendants’ application for an inquiry as to damages caused by the Injunction

18. According to Mr Yan SC, this arises because in exercise of the Court’s discretion whether or not to enforce the Plaintiff’s cross-undertaking as to damages, all the circumstances of the case including, in particular, the Defendants’ conduct in the enforcement of such undertaking are relevant.  See, for example, F Hoffmann-La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 295 (HL) per Lord Diplock at 361D-F and Cheltenham & Gloucester Building Society v Ricketts [1993] 1 WLR 1545 (CA) per Peter Gibson LJ at 1554H-1556F.

19. The Defendants’ conduct that the Plaintiff had in mind in this context was the failure to disclose information and documents concerning Mr Leiduck’s competence to the court and to the Plaintiff until late August 2013 and to explain such delay.

20. The Plaintiff questioned the timing of the disclosure that called into question Mr Leiduck’s competence as a party and as a witness, having regard to the fact that the 1^st Pfeffer Report, which came into existence on 11 June 2013, clearly identified the capacity being assessed to be Mr Leiduck’s fitness to be questioned as a witness in legal proceedings and expressed the view that Mr Leiduck was “legally incompetent, incapable of being questioned and unfit to face proceedings in view of his cognitive and emotional disturbances as well as his physical impairment”.

21. Insofar as we are concerned with the conduct of these proceedings by Mr Leiduck himself, as noted by Mr Horace Wong SC (with him Mr Clark Wang), Counsel for the Defendants, in paragraph 43 of his Skeleton Submissions, the Stein Report and the Pfeffer Reports are reports of the 1^st Defendant.  They can be taken as being in his hands once they were compiled.

22. The difficulty that I have with the Interrogatories, insofar as we are concerned with the Defendants’ conduct of these proceedings, is that what they seek to establish is the time when Mr Leiduck Jr and Robertsons became aware that Mr Leiduck had, or might have, become incompetent.  Mr Leiduck Jr is not a party to these proceedings until his appointment as Mr Leiduck’s next friend on 5 November 2013.  As for Robertsons, they are the Defendants’ solicitors herein.  Given the Defendants’ acceptance that the Stein Report and the Pfeffer Reports can be treated as being in Mr Leiduck’s hands once they were compiled, I do not see how fixing the time of Robertsons’ knowledge would add to the Plaintiff’s argument as regards the Defendants’ conduct of these proceedings.

23. In conclusion, I do not find the Interrogatories necessary, or even relevant, to the Defendants’ conduct of these proceedings.

Relevance to, and necessity for the fair disposal of, the question of costs

24. Depending on my finding as to when Mr Leiduck became incompetent,[1] I do not disagree with the Plaintiff that the wastage of costs in connection with Mr Leiduck’s evidence could be substantial.

25. It is plain from the Interrogatories, which are set to ascertain knowledge of Mr Leiduck’s incompetence on the parts of Mr Leiduck Jr (a non-party until 5 November 2013) and Robertsons (the Defendants’ solicitors), that the issues of costs that the Plaintiff is contemplating are that between the Plaintiff and Mr Leiduck Jr and Robertsons.  Paragraph 45 of Mr Yan SC’s Skeleton Submissions said as much as regards Robertsons. 

26. However, paragraph 45 of Mr Yan SC’s Skeleton Submissions merely asserted that “[t]he failure of the Defendants’ legal team to raise the need for the appointment of a next friend for Mr Leiduck notwithstanding their knowledge of his likely incompetence is also relevant to the issue whether they should be made personally liable for the costs of the proceedings or part thereof.”  Counsel did not go on to explain how it was said that Robertsons acquired the relevant knowledge earlier than what they have already disclosed or that substantial costs have been wasted by Robertsons not acting upon such knowledge earlier than they did.  In a nutshell, while there is a veiled suggestion that the Plaintiff might have grounds to seek costs against Mr Leiduck Jr and Robertsons, I have been left very uncertain of the existence of a present issue of costs between the Plaintiff and Mr Leiduck Jr or Robertsons, to which the Interrogatories could relate. 

27. The making of an order against a non-party to pay costs, which is empowered by s 52A(2) of the High Court Ordinance (Cap 4) when the court is satisfied that it is in the interest of justice to make such an order, is procedurally governed by Order 62, rule 6A of the Rules of the High Court.  Rules 6A contemplates a two-stage process, the first of which is to consider whether the targeted non-party should be joined as a party for the purposes of costs.  The applicant would normally be expected to explain the nature of claim against the intended party. The claim would only be allowed to proceed if there is a good arguable case. See Hong Kong Civil Procedure 2016, Volume 1, paragraphs 62/6A/5 and 62/6A/11.

28. The making of a wasted costs order against a legal representative personally is regulated by Order 62, rules 8, 8A, 8B and 8C.  For present purposes, I note in particular that this is also a two-stage process and that the first stage is for the court to be satisfied, inter alia, that it has before it evidence or other material which, if unanswered, would be likely to lead to a wasted costs order being made.  See rule 8B(1)(a)(i).  At this stage, the court has to take into account the strength of the prima facie case shown by the applicant: Ma So So v Chin Yuk Lun [2004] 3 HKLRD 294, per Li CJ at [16].  Section 52A(6) of the High Court Ordinance defines “wasted costs” to mean any costs incurred by a party as a result of an improper or unreasonable act or omission or any undue delay or other misconduct or default on the part of a legal representative etc.  Rule 8C prohibits a party from indicating to another party or any of that party’s legal representatives that he intends to apply for a wasted costs order unless he is satisfied that he is able to particularise the behaviour of the legal representative from which the wasted costs concerned are alleged to result and to identify the evidence or other materials on which he relies in support of the allegation.

29. It can be seen that the mechanism for seeking costs against a non-party or a legal representative does not include a roving inquiry into the conduct of the non-party or legal representative to enable the applying party to gather evidence or other materials to build or support the costs application against the non-party or legal representative.  Rather it is upon the applying party to show at the first stage a case that justifies it being allowed to proceed to the second stage (of hearing and adjudication).

30. While I pass no comment on whether the Plaintiff presently has sufficient evidence to raise the issue of wasted costs against Mr Leiduck Jr or Robertsons, it is plain from the terms of the Interrogatories that they are sought with a view to obtaining materials to boost the Plaintiff’s position on costs against Mr Leiduck Jr and Robertsons, if not to put the Plaintiff in the position to mount applications for costs against Mr Leiduck Jr and Robertsons.  I agree with Mr Wong SC that the Interrogatories is a fishing expedition.  This is not permissible.  See, e.g. Lee Nui Foon v Ocean Park Corp (No 2) [1995] 2 HKC 395, per Cheung J at 396I-397F.

Whether necessary for saving costs

31. This applies only to Interrogatories 1(i), 9(i) to (vi), 11(i) and 13(i)) concerning Mr Leiduck Jr’s first observation of symptoms of cognitive loss on the part of Mr Leiduck which, for the reasons explained in paragraphs 11 to 17 above, may potentially be relevant to, but are not necessary for the fair disposal of, the issue of Mr Leiduck’s competence in 2013.

32. Mr Yan SC’s alternative case of necessity based on potential costs saving was advanced on the notion that the Plaintiff might otherwise have to require the affirmants to be tendered for cross-examination on the affidavits from which the Interrogatories arose.  I can deal with this shortly.  It would have been most unlikely that such cross-examination would be allowed given the relatively little weight that Mr Leiduck Jr’s observations would command in view of the whole body of medical and nursing records on Mr Leiduck that has been disclosed by the Defendants.

Order

33. For the above reasons, I dismiss the Plaintiff’s Summons dated 2 December 2013.  I also make an order nisi that the Plaintiff should pay the Defendants’ costs to be assessed summarily.  The Defendants should file and serve their statement of costs within 14 days.  The Plaintiff should file and serve its statement of objections (if any) within 14 days thereafter.  The Defendants should have 14 days to respond to the Plaintiff’s objections (if any).